A proposed apartment complex on a site two blocks east of the $100 million outlet mall under construction in Eagan is moving briskly through the approval process.

The Cedar Grove Apartments complex would be the latest development for the Cedar Grove Redevelopment District, which is east of Cedar Avenue and on the north and south sides of Highway 13.

Apple Valley-based Stonebridge Construction has proposed a four-story, 180-unit market-rate apartment building over an underground parking ramp. The building will occupy 4.8 acres at the corner of Cedarvale Boulevard and Cedar Grove Parkway, near Cedar Avenue and Highway 13.

The city of Eagan has wanted to redevelop the area for several years, but the economic downturn and other factors worked against it. Then on June 4, Paragon Partners broke ground on the 420,000-square-foot outlet mall.

The Twin Cities at Eagan mall, which will occupy the southeast corner at Highway 13 and Cedar Avenue, is scheduled to open in August 2014. Eagan community development director Jon Hohenstein said that interest from developers has increased since the project began.

Stonebridge CEO Wally Johnson said that that rents for the Cedar Grove Apartments will range between about $1,000 and $2,000. The plan calls for efficiencies, studios, one-bedroom units, one-bedrooms with dens, two-bedrooms and three-bedrooms. Some units will have fireplaces and balconies. The complex will also include up to 14,000 square feet of retail space.

Water and sewer lines are being updated in Cedar Grove Redevelopment District in Eagan. (Staff photo: Bill Klotz)

The Eagan Economic Development Authority’s “long-term vision for that area is mixed use generally, so the combination of retail and housing aligns well with that,” Hohenstein said.

The authority approved Stonebridge’s concept plan on June 4, and on July 2 the authority will consider whether to accept its purchase agreement.

Under the agreement, Stonebridge would pay the authority $1.8 million for the land, or $375,000 per acre. If the agreement is approved, Stonebridge would likely submit a development application to be considered by the city’s planning commission in August and the full city council in September.

Johnson said that the process is on schedule for Stonebridge to break ground in October, and that the building will take 14 months for full completion. “We would hope to open in phases starting at about 10 months,” he said.

The architect for the project is Kaas Willson of Minneapolis.

The complex would be part of more increased activity than just the outlet mall. West of the proposed complex is Jensen’s Supper Club, which owner Doron Jensen plans to expand in hopes of increased business from the mall traffic.

Jensen has proposed paying the Eagan authority $310,000 for a 31,000-square-foot parcel west of the restaurant, which would allow the restaurant to expand and add more parking. The authority will also consider a purchase agreement on July 2.

Mary Bujold, president and research director for Minneapolis-based real estate research firm Maxfield, said that the project is coming along at the right time. “Eagan really needs some new apartment development because most of the apartment projects are 10 to 15 years old,” she said. “It’s a very large community and they could certainly support some new development.”

As of the first quarter of 2013, the apartment vacancy rate for Eagan was 3.3 percent, Bujold said.

The Cedar Grove area exemplifies what Bujold calls a new model in the outlet mall business. For the most part, outlet malls have been built outside of urban areas, but now that retailers are developing separate lines of clothing for them, more are being built within city limits.

“The whole model has changed, and the value proposition to the customer has also changed in the downturn, because customers are doing more value shopping,” she said. “Getting the outlet mall there was a great idea for that location, and it will generate a lot of traffic in that area.”

The location, added traffic from the outlet mall, and increased restaurant traffic suggested to Bujold that the Cedar Grove Apartments could be filled within 12 to 15 months of completion.

“It’s an excellent location with great views, and we think there’s going to be a big upsurge in that area,” Johnson said. “It’s close to Mall of America and the new Cedar Avenue [bus rapid transit] line, and there’s easy access to the airport. We’re kind of thrilled about the site.”